MB286: The Rocky Transition from Flips to Multifamily – With J Scott

Financial Freedom with Real Estate Investing

You might think it would be easy for a well-known flipper to transition to multifamily. But the truth is, a successful career in single-family does NOT translate to the world of apartment building investing.

So, how do you make the leap from single-family rentals and flips to multifamily investor?

J Scott serves as Partner at Bar Down Investments, a multifamily investing firm with a portfolio of 1,000 units. J got his start in single-family real estate and built a reputation in the flipping business, rehabbing 500 properties and authoring four bestselling books in the BiggerPockets library. And then 18 months ago, J made the transition to multifamily investing.

On this episode of the podcast, J joins cohost Garrett Lynch and me to share what inspired his move into multifamily and explain why flipping houses is not the path to financial freedom. He opens up about lacking credibility in the multifamily space, offering insight on how to get brokers to trust you if you’re new to the game. Listen in to understand the 3 things you need to get investors to work with you and learn how to build a reputation in the multifamily space—with or without prior real estate experience!

Key Takeaways

How J got into the real estate space

• Work long hours as corporate engineer in tech space
• Shift to real estate in 2008 to 'put family first'

What inspired J’s transition to multifamily

• Burned out on flips and single-family rentals
• Had cash to invest but didn’t trust anyone else

Why flipping houses is not the path to financial freedom

• Transactional (trade time for money)
• Need passive income stream

Why it took J so long to make the shift to multifamily

• Ego (reputation as ‘flip guy’)
• No credibility in multifamily space

What J did to compensate for his lack of credibility

• Admit had to start over, build new relationships
• Find mentor and add value

How to get brokers to trust you if you’re new to multifamily

• Partner with someone who has track record
• Prove serious by underwriting and giving feedback

J’s advice for investors considering a shift to multifamily

• Build marketing machine for 6 months first
• Multifamily scales much better

The benefit of having single-family experience

• Learn mechanics of deal with less money at risk
• Skills of acquisitions, underwriting, raising money

The 3 things you need to get an investor to work with you

• Build relationship so they LIKE and TRUST you
• Make them NEED you (e.g.: retirement plan)

How to differentiate yourself from bigger operators

• Do what you’re good at, educate new investors
• Tap into personal network

Connect with J Scott

J’s Website

Bar Down Investments

Resources

Join the Nighthawk Equity Investor Club

Learn More About Michael’s Mentoring Program

Access Michael’s Blueprint to Your First Multifamily Deal Training

Financial Freedom with Real Estate Investing by Michael Blank

Books by J Scott

Rich Dad Poor Dad by Robert T. Kiyosaki

Ashley Wilson

How to Win Friends & Influence People by Dale Carnegie

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group

Podcast Show Notes